Charbonneau: Expensive pipes had added costs

Monique Muise, The Gazette11.26.2012

The Charbonneau inquiry is expected to hear testimony from Michel Cadotte, director of sales for Ipex, a company supplying a particular - and very costly - type of piping (TerraBrute pipes) used by the city of Montreal.

MONTREAL — Michel Cadotte says he learned the hard way that having well-placed friends in Montreal's construction industry can open plenty of doors, but that those doors can just as easily be slammed shut if you're not willing to grease a few palms.

Cadotte, a local businessman who took the stand at the Charbonneau Commission on Thursday afternoon, testified that in 2006, his company — construction materials supplier Ipex — briefly enjoyed the favour of city officials and Montreal's biggest construction magnates.

For a few months, he said, it seemed everyone was interested in using Ipex's specialty "TerraBrute" pipes for aqueduct and sewer projects. As Ipex's sales director, Cadotte said he had attempted to peddle his company's wares to the city for more than a decade, but never had any success until he attended a meeting with local entrepreneurs Paolo Catania and Nicolo Milioto in early 2006.

According to Cadotte, Catania phoned and asked to meet with him seemingly out of the blue.

The timing was suspicious, Cadotte noted, because just a few weeks earlier, he had gone to see the then-head of public works at the city, Robert Marcil, to inform him that a construction crew on St. Denis St. was installing pipes that weren't properly certified. Marcil had found that Cadotte was right, and that the pipes were rusting before they had even been put in the ground.

"I had the impression that (Milioto) ... was somehow linked to the city of Montreal," said Cadotte, adding that shortly after he met with Milioto and Catania, the city suddenly decided it wanted to use the specific type of piping that Ipex sold, and entrepreneurs began scrambling to get their hands on it.

At first everything went smoothly, Cadotte testified, and his company stocked up on about $800,000 worth of the pipes to fill the orders they were assured would be coming in. But then, when only about half of the inventory had been sold, the orders suddenly stopped. Cadotte said he went to see Milioto to ask what was wrong.

Milioto — identified by previous witnesses as the middleman between Montreal's construction bosses and the powerful Rizzuto crime family — allegedly explained to Cadotte that the rest of the pipes would be out of Ipex's warehouse soon, but first, Milioto had "people to pay" at city hall and he needed $150,000 in cash from Ipex to do it.

Cadotte said Thursday that he understood the kickback money would be divided between three unnamed public officials, and then the rest of the orders for the TerraBrute pipes would flow in.

Ipex's response was a resounding "No."

The witness told the commissioners that one of his bosses at the company was so offended by the suggestion that he promised Cadotte that "the day we jump on board with this, we'll shut down our factories and never sell another pipe."

"That is not the way we do things," Cadotte told the commissioners. "We don't pay to work."

The refusal marked the end of Ipex's moment in the sun in Montreal, he said. No additional orders came in, and a short time later, the city produced a report that recommended using only two types of pipes on future infrastructure projects — neither of which were the TerraBrute pipes.

"It was over for us," Cadotte testified, adding that the situation endures to this day. "In Montreal, even if we're at one-quarter or one-third of (a competitor's) price, we don't get the orders."

Asked why he never reported what happened to anyone, Cadotte acknowledged that keeping quiet was a mistake.

"I should have reported it to someone, but I didn't," he said.

Earlier in the day, the commission heard more from construction entrepreneur André Durocher, who testified that his company, Excavations Panthère, was "blacklisted" by the provincial Transport Department beginning in 2010. The company, now under bankruptcy protection, was told it would no longer be permitted to submit bids on provincial roadworks projects after failing to complete a project to the department's satisfaction in 2009.

According to a report produced by the MTQ and engineering firm Dessau-Soprin, Excavations Panthère did not use the proper materials and did not respect the timeline for the work set out in the original contract plans. Durocher, who testified on Wednesday that he never participated in any collusion on public works contracts, maintained that the delays on the project were due to bad weather, and that Dessau-Soprin wanted his company to be blacklisted from the start. He had taken the engineering firm to court for payment on another contract in 2003, he said, and they wanted to drive him out of business. His is the only company on that list that hadn't been accused of fraud, he noted.

Almost Done!

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.